Worley Limited · ASX:WOR
Worley — WorleyParsons — Investor Day (October 2008)
71 slides from Worley's investor day presentation, Oct 29, 2008
Slide 1: For personal use only
For personal use only
Slide 2: WorleyParsons Select Front End Consulting Division
For personal use only WorleyParsons Select Front End Consulting Division Andy Cole – Global Director
Slide 3: Presentation Elements
PRESENTATION For personal use only ELEMENTS ► What is WorleyParsons’ Select ► Why do companies use Select services? ► The breadth of our capability ► What is our competitive advantage? ► Examples of current projects ► How they influence our business
Slide 4: Who are we?
Who are we? For personal use only X Select is a specialist capability of WorleyParsons, focused on project viability assessment and selection Select covers Phases 1 & 2 … It is the front-end consulting division of WorleyParsons
Slide 5: Why is Select needed?
Why is Select needed? For personal use only X Phase 1 & 2 are known as the ‘value adding’ phases of the asset life cycle X After Select … the project maintains value by keeping to cost & schedule (or erodes value through poor execution)
Slide 6: When do customers use Select?
When do customers use Select? For personal use only
Slide 7: Our global presence
Our global presence For personal use only X There is a Select division in each WorleyParsons location that has the technical expertise and the client base to support such a service | 16 locations | 6% of company EBIT Canada Southeast Asia, • Calgary China & Middle East • Edmonton • Beijing • Toronto
Slide 8: Some differentiators
Some differentiators For personal use only 1. Select is an internal division of WorleyParsons – not a separate company Niche consulting skills combined with practical experience in project delivery and plant operation. Access to a global data base of major capital projects enables customers to m
Slide 9: Select markets
Select markets For personal use only X The Select service offering is tailored to the Customer Sector Group Hydrocarbons Power Minerals & Metals Infrastructure & Environment X Greenfield development X Strategic planning and X Strategic investment X Brownfield optimization financial analysis decision
Slide 10: Why is Select important to WorleyParsons?
Why is Select important to WorleyParsons? For personal use only X Winning the Select phase of a project positions WorleyParsons for the “pull-thru” opportunity. X Select skills attract a premium rate in the market X Strategy delivery platform X Entry vehicle into new markets & regions X Develops kno
Slide 11: Example: M&M Perth project pipeline, January 2007
Example : M&M Perth project pipeline, January 2007 For personal use only SELECT DELIVER IMPROVE Worsley Alumina Efficiency & BHP Billiton Growth Nickel West FMG Cloud Break Team 45 Moly Mines Spinifex Ridge BHPBilliton Worsley Alumina 28/10/2008
Slide 12: Example: M&M Perth project pipeline, January 2008
Example : M&M Perth project pipeline, January 2008 For personal use only SELECT DELIVER IMPROVE Sinosteel Worsley Alumina Midwest & Efficiency BHP Billiton Weld Range Growth Nickel West FMG Cloud Break Team 45 FMG Moly Mines Solomon Team 100 FMG Spinifex Ridge Solomon Team 200 Consmin BHPBilliton Mi
Slide 13: Example: M&M Perth project pipeline, January 2009
Example : M&M Perth project pipeline, January 2009 For personal use only SELECT DELIVER IMPROVE NEW RioTinto 2 NEW Citadel Copper Mine Devel. NEW Rio Tinto Rail NEW Sinosteel Maintenance Worsley Alumina RioTinto 3 Midwest Efficiency & BHP Billiton Weld Range Growth Nickel West NEW FMG Bauxite Res. C
Slide 14: Examples of past 'pull through' from Select
Examples of past ‘pull through’ from Select For personal use only XSingapore LNG Terminal XNorth Rankin 2 XCustomer: Power Gas XCustomer: Woodside Energy Limited XStatus: Currently in FEED Phase XStatus: Currently in Detail Design Phase XTo increase the security of Singapore’s domestic gas XThis is
Slide 15: Examples of past 'Pull Through' from Select
Examples of past “Pull Through” from Select For personal use only XMa’aden Phosphate Project X Perth Seawater Desalination Plant XCustomer: Saudi Arabian Mining Company X Customer: Multiplex Degremont JV XStatus : On going PMC role X Status : Operating Asset XThe project covers development of the ph
Slide 16: Examples of past 'Pull Through' from Select
Examples of past “Pull Through” from Select For personal use only X Pilbara Iron Ore and Infrastructure Project X MacKay River SAGD Expansion X Customer: Fortescue Metals Group X Customer: PetroCanada X Status : Operating asset X Status: Completed FEED Phase X WorleyParsons’ role on this project beg
Slide 17: Examples of current Select studies
Examples of current Select studies For personal use only XAlaska North Slope Renewal Program X Wheatstone Development XCustomer: BP Alaska X Customer: Chevron Australia Ltd XSelect office : Arcadia, California X Select Office : Perth, WA XBP Exploration Alaska established the Alaska North Slope X Ch
Slide 18: Summary points
SUMMARY POINTS For personal use only ► Select is a key element of the WorleyParsons’ service offering covering the front end development of projects ► Consulting services executed from 16 locations ► Strong track record in all four industry sectors ► WorleyParsons is committed to further developing
Slide 19: For personal use only
For personal use only
Slide 20: Mega-projects
For personal use only Mega-projects Bill Hall – Managing Director
Slide 21: Presentation Elements
PRESENTATION For personal use only ELEMENTS ► Defining mega-projects ► Execution challenges ► Our approach ► Examples of current mega- projects
Slide 22: Defining mega-projects
Defining mega-projects For personal use only X Total installed cost for our portion of the project in excess of $1 billion X Significant services X Engineering X Engineering/Procurement X Engineering/Procurement/Construction Management (EPCm) X Program Management (PMC) services overseeing multiple c
Slide 23: The number of mega-projects is increasing
The number of mega-projects is increasing For personal use only X Remote locations X Technology challenges X Merged customers chasing elephants X Cost increases X Economy of scale
Slide 24: Key challenges
Key challenges For personal use only X Logistics X Complexity X Need to workshare X Need to partner X Cost and schedule prediction and achievement X Construction contractor size and capability X Foreign exchange X Cash flow predictions and management X Impacts on getting it wrong
Slide 25: Our approach
Our approach For personal use only X Treat as a stand alone business X Run by a Managing Director charged with: • Starting the business up • Maintaining a safe environment • Producing a quality product • Operating on schedule • Operating within budget. • Set up stage for Improve X Employ common syst
Slide 26: Our approach
Our approach For personal use only X Project management staff are global resources X Local resources X Maintain a long track record as an exemplary partner X Excellence in Select phase X Construction management capability X Worldwide procurement
Slide 27: Pluto / Exxon Mobil - Singapore Parallel Train
For personal use only X Pluto Exxon Mobil - Singapore Parallel Train
Slide 28: Chevron Phillips - NCP
For personal use only Chevron Phillips - NCP
Slide 29: TCO, Kazakhstan
For personal use only TCO, Kazahkstan
Slide 30: Agip KCO – Kashagan Full Field Development
For personal use only Agip KCO – Kashagan Full Field Development
Slide 31: Nigeria – Maintain Integrity Projects
For personal use only Nigeria – Maintain Integrity Projects
Slide 32: Woodside Energy - Pluto LNG development
For personal use only Woodside Energy - Pluto LNG development
Slide 33: Arkutun – Dagi Field Development
For personal use only Arkutun – Dagi Field Development
Slide 34: Belene Nuclear Power Plant
For personal use only Belene Nuclear Power Plant
Slide 35: UAE – EMAL Aluminium Smelter
For personal use only UAE – EMAL Aluminium Smelter
Slide 36: Saudi Arabia – Ma'aden
For personal use only Saudi Arabia – Ma’aden
Slide 37: Summary points
SUMMARY POINTS For personal use only ► Mega-projects will continue to be funded by tier one companies and nations ► Successful execution of these projects is challenging and within the remit of few contractors around the world ► The creation of a separate division to meet these challenges has proven
Slide 38: For personal use only
For personal use only
Slide 39: WorleyParsons Improve
WorleyParsons For personal use only Improve Graeme Henderson – ANZ Director Improve Colin Hamilton – One Steel Alliance Manager
Slide 40: Presentation Elements
PRESENTATION For personal use only ELEMENTS ►What is Improve and why is attractive to WorleyParsons? ►Global growth of the Improve business ►Improve growth strategies
Slide 41: What is Improve?
What is Improve? For personal use only ► Improve focuses on the worldwide asset services business. helping our customers achieve world class capital effectiveness in their brownfield operations through our unique approach to long term contracts. ► We provide a full range of: • High value project del
Slide 42: Why Improve contracts are attractive
Why Improve contracts are attractive For personal use only WorleyParsons’ Improve Model Traditional Contracting New Asset EPCM $50m PMC or EPCM AUD100m $250m Improve Existing Asset $50m PMC or Replacement Asset EPCM EPCM AUD100m $250m Improve Existing Asset
Slide 43: Total asset life-cycle value approach
Total asset life-cyle value approach For personal use only Brownfield Assets “Leave behind” Improve Improve Major Projects Major • Asset Services • Major green-fields Brownfields & Management Projects • Operations & Maintenance Support • Business Improvement “Pull • Project portfolio through” delive
Slide 44: Why Improve is important to WorleyParsons
Why Improve is important to WorleyParsons For personal use only X Executing Improve work ‘grounds’ WorleyParsons in the realities of the key success factors for our customers in their industries and regions. X Enhances WorleyParsons safety culture X Exceptional opportunity to identify high value opp
Slide 45: Our competitive advantage
Our competitive advantage For personal use only 1. Location, location, location 114 offices worldwide – 85 offices with less than 200 personnel Close to customers’ operations and substantial enough to support full service 2. Service tailored to customer business objectives in each region and ind
Slide 46: Global growth of Improve contracts
Global growth of Improve contracts For personal use only 160 140 120 100 80 60 40 20 0 2002 2003 2004 2005 2006 2007 2008 Year
Slide 47: Global map of Improve contracts – Currently
Global map of Improve contracts – Currently 139 For personal use only Canada Improve Customers (36 Contracts) • Agrium • ConocoPhillips Canada • Innovene • Shell (2 contracts) Europe/Africa Improve Customers (3 Contracts) • Albian Sands (Shell) • Devon Canada Corporation • Layton Bros Construction C
Slide 48: Our preferred position with customers
Our preferred position with customers For personal use only Best Price Analysis Global Product Sourcing Redesign Category Sourcing Strategy Process Strategic Product Relationship Redesign Improvement Few qualified suppliers Category High dependence on supply Sourcing Volume Strategy A degree o
Slide 49: Improve growth strategies
Improve growth strategies For personal use only Scenario A B C D E Key Client Alliance Alliance Alliance Project Alliance Grow Grow Create Retain Service Service Reference Alliance Site Brown- fields Project Alliance Alliance Alliance Site #1 Site #2 Site #3 Value to WorleyParsons
Slide 50: In-house capability development program
In-house capability development program For personal use only Approximately A$40M invested in the Improve capability over the past ten years People training and development Systems and operating platform Forums and conferences Knowledge management Decision making software and intellectua
Slide 51: Improve Full Value Index
Improve Full Value Index For personal use only Business Benefits from Global Sharing of Leading Practices Europe Canada Asia Improve USA ANZ Latin America
Slide 52: Alliance, Newcastle, NSW
For personal use only Alliance, Newcastle, NSW Colin Hamilton – Alliance Manager
Slide 53: OneSteel timeline
OneSteel timeline For personal use only Alliance Value Pre Project Stream Review reviews Mapping Alliance Go/No-Go Overhead Project Deployment Meeting Intranet Review Cycle Time FEL Health Gated Reduction Index Process Quarterly Scoring Business Capital Plan Review Profit 90 day Steering @ risk plan
Slide 54: Key metrics on the One Steel contract
Key metrics on the One Steel contract For personal use only 2002 2004 2008 Alliance productivity (capital spend per employee) (Alliance Commenced) Budget $25M $25m $25M $400,000 $350,000 Spend $16M $11.5M $23.9M $300,000 $250,000 % budgeted 40% 35% 5% $200,000 projects cancelled $150,000 or deferred
Slide 55: Cycle time
Cycle time For personal use only Project Cycle Time Jun 08 900 Execute 800 Authorisation 700 Define Phase Assess/Select Gap 600 Calendar Days Assess Phase 500 400 3 9 5 10 300 5 1 4 12 200 14 3 7 2 8 14 10 3 5 5 5 100 15 6 3 2 2 17 4 9 16 13 9 5 12 1 0 et 05 05 06 06 06 06 07 07 07 07 08 08 e rg t i
Slide 56: Key Learnings
Key Learnings: For personal use only ► Quality user requirement specification ► Front End Loading process ► Right rigor at right time (streamline where appropriate) ► Quarterly capital review meeting ► Rolling plan, minimum Assess phase to enter and composite ranking ► Creatively challenge and kill
Slide 57: Summary points
SUMMARY POINTS For personal use only ► Improve is a core offering within WorleyParsons that provides multiple options for ongoing services to customers ► Continues to be globally successful at retaining and growing existing contracts and securing new contracts ► Have developed a strong in-house know
Slide 58: For personal use only
For personal use only
Slide 59: WorleyParsons Risk Management
For personal use only WorleyParsons Risk Management Greg Clinnick – Global Director
Slide 60: Presentation Elements
PRESENTATION For personal use only ELEMENTS ► Enterprise risk management rationale ► Risk management framework ► Business resilience R3 ► Risk management resources ► Example of the project risk management process ► Alignment with corporate vision
Slide 61: Enterprise risk management
Enterprise risk management For personal use only X Vision To increase shareholder value by creating in WorleyParsons a culture of risk management commensurate with our entrepreneurial spirit X Goals To have a risk management process in place across the whole Enterprise To have risk management
Slide 62: Why do we do it?
Why do we do it? For personal use only X Corporate governance and compliance with ASX Principle 7 X A business necessity. Complies with risk management and ISO standards X Proven to be effective in increasing the likelihood of achieving desired outcomes X Supports alignment with clients and stakehol
Slide 63: Alignment with corporate vision
Alignment with corporate vision For personal use only SEEK AVOID X First grade clients X Aggressive commercial and contractual terms X Fair and reasonable contract terms X Lump sum turn key EPC projects X Reimbursable commercial arrangements X Construction (although low risk reimbursable constructio
Slide 64: WorleyParsons risk management framework
WorleyParsons risk management framework For personal use only X Delegation of authority High ethical and corporate governance standards Business appropriate reporting structures and communications Contract review and special risks Effective systems and processes (WPMP/EMS/Oracle/Knowledge Ma
Slide 65: Business Resilience R3
Business Resilience R3 For personal use only X Ready, Response, Recovery Crisis and emergency management Security and intelligence Mobility management Business continuity Reputation management X Application High risk locations Emergency medical treatment and evacuations Hurricanes
Slide 66: Project risk management process
Project risk mamagement process For personal use only X Requires that all new proposals and projects are assessed, classified Risk Map Insignificant Minor Consequence Moderate Major Catastrophic and managed in terms of the Before Treatment 1 Up To $10,000 2 Up To $100,000 3 18 33 56 57 81 3 Up To $1
Slide 67: Project risk process outcomes
Project risk process outcomes For personal use only X Alignment of the project team Risk Map Insignificant Minor Consequence Moderate Major Catastrophic After Treatment 1 2 3 4 5 X Better understanding of the Up To $10,000 Up To $100,000 3 18 33 56 57 81 Up To $1,000,000 9 46 92 107 113 Up To $10,00
Slide 68: Project risk process deliverables
Project risk process deliverables For personal use only
Slide 69: Outcomes from risk management
Outcomes from risk management For personal use only X No material events X Few legal claims or disputes X Outstanding client and long term contract retention record X Sustained growth and profitability X Successful strategies and business decisions X Good project outcomes for clients
Slide 70: Deliverables from formal risk workshops
Deliverables from formal risk workshops For personal use only X Register of risks and opportunities for the project X Mitigation plans with assigned responsibilities and completion dates X Mitigation plans aligned with risk ratings and priorities X Risk map X Alignment of project team and other stak
Slide 71: Summary points
SUMMARY POINTS For personal use only ► Our aim is to manage and control risks to achieve optimal outcomes in line with corporate strategy ► Impregnated into the culture of the company and embedded into our Management Systems ► Completed global roll out business resilience program – R3 ► Ongoing vigi